Glassdoor on Friday announced that it had raised another $40 million, led by mutual fund giant T. Rowe Price Associates.
Glassdoor founder and CEO Robert Hohman tells us the fundraising is part of his master plan to have a spectacular IPO.
Having a major mutual fund as an investor will help with introductions, advice and everything else needed to convince other institutional investors to jump on board the IPO.
“By the time we do go public, we’ll know who major shareholders are likely to be,” Hohman says. “I wanted that. I wanted someone like T. Rowe prior to being public to provide that kind of anchor.”
Hohman says that he and T. Rowe fund manager, Henry Ellenbogen, have been talking for years, having met at various conferences held by investment banks where fund managers and startups can schmooze.
Glassdoor, a job-hunting site where employees share salary information and reviews of their companies, raised a huge $162 million round in January, 2015. With this round, it’s raised about $200 million total since it was founded in 2007, it says.
Hohman insists his company is not burning through cash and is balancing growth and profits. When he takes Glassdoor public, he hopes to show investors a company that is growing revenues “profitably or very close to cash-flow break even,” he says.
Profitable startups have been rare in tech for the past few years where investors, public and private, valued revenue growth over all else. One VC has been warning the world that this kind of hyper-growth is a very bad idea: Benchmark’s Bill Gurley. And Gurley was an early investor in Glassdoor.
“I credit Gurley for advising us to pay attention to how we grow,” Hohman says.
Glassdoor has now raised about $200 million although it isn’t quite a “unicorn,” the Silicon Valley term for startups valued at $1 billion or more by their investors.
Hohman wouldn’t tell us the final valuation after this round, except to describe it as a “modest up round” meaning the company is now valued slightly more than it was before the round.
Private funding tracking site PitchBook says that Glassdoor has been looking for investors since April and was expected to close this $40 million round by August at a pre-money valuation of $820 million, with a post money valuation of $860 million.